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It is somewhat fitting that the first Head of Government to address the Knesset should be the Chancellor of Germany. The trip of Angela Merkel to Israel has been either overshadowed or overlooked depending on your point of view, and it is somewhat less than Nixon in China of course. But it still has a resonance and an importance that many overlook.

I admire Angela Merkel tremendously. She gets on with the job, whatever it is. Those silly enough to make themselves enemies end up either working for her or lying on the side of the road. Her modus operandi seems to consist of hard work and common sense, and in most things she appears the practical, sensible German physicist that she is. In an histrionic political world, she is a light of sense.

She is also somewhat put-upon by bullies who never quite realise what they are dealing with. I was particularly struck by the story of Vladimir Putin, who found out that Angie had a dog phobia, and promptly made sure he had a big canine for her to pet before every meeting. Ah, what larks. At least it stopped him liquidating people for a moment or two.

So Frau Merkel's dignified and intelligent speech to the Knesset today deserves praise. You can read reports of it here, but the only version I could find is here in German. Why continental Europeans insist on not speaking English is beyond me. I'm reminded of President Bush's typically incisive observation that the problem with the French, for instance, is that they have no word for entrepreneur.

Germany is the most consistent friend of Israel in modern Europe. In Merkel's case, this is partly because of her disgust at what she saw as communist-inspired antisemitism in East Germany, and obviously of course a sort of heuristic compensation for the past. Despite that, Germany has friends amongst some of the Palestinians too, as you can see from the press reports here.

The modern German State is a wonderful democratic and legal achievement and its warm-hearted balancing act in the Middle East is somewhat heartwarming to me. Balancing Acts are becoming harder by the day as most Palestinians, polls and reason show, seem to be more interested in violence than talks. Merkel last acknowledged this point two years ago in Washington, and things have got worse since then. Germany itself has concluded that it is now much more of a target for Jihadis than previously.

Elsewhere, I note that Al-Qaeda seem to have released another tape, purporting to condemn the Catholic Church and the entire West this time. This plays upon the post-regensburg well of hysteria whipped up by Iranian theocrats when they were funding all those cartoon and anti-pope protests so as to build some diplomatic tank-traps last year.

The forces of radicalised Islam should be frightened of the Church's long game. I've already noted the way that Father Koerner, and his Jesuit colleagues, have convened a serious discussion amongst Muslim scholars in Turkey about moderation and modernisation of the Hadith and therefore the interpretation of the Koran.

These sort of efforts to recast fundamental ideas might start as arcane debates. They move mountains though, often by renaming and redefining them until everyone forgets they were ever where people thought they were.

The Pope himself also seems to have been in touch with the Saudi monarch to try and introduce and strengthen the Church in the Saudi Kingdom, and has had some success. This follows on from the Saudi King's historic visit to the Vatican last year. This is the sort of thing that could topple the Saudis in a different set of circumstances but which would be a miraculous achievement that could last if carried out within the next two years.

A third push, aimed at protecting and enhancing the status of Coptic, Chaldean and other uniate Catholics in Iraq and elsewhere is ongoing. Bad men have reason to fear the Pope's strategy, and that, combined with their theopolitical fixations, is presumably why they are having a go. By enmeshing North Africa, Turkey and Saudi Arabia in terms of theological trade that would preserve lives and enhance dialogue, the Church would further intellectually the process of untangling one of the arcs of instability that bedevil modern Europe. A properly conceived, open and transparent Mediterranean secular political condominium and an above-the-desk deal on oil, gas and migration within that sphere could transform the area.

Back to merkel, however. This is her sort of thing but she will soon have more pressing concerns. Domestic politics in Germany, concerned with the displacement effects of the rise of the Left Party, may well deny her reelection.

That would be a pity to my mind. The Economic storms that are blowing are about to be diverted to the euro, which is very strained between North and South. I can't imagine anyone less likely to be blown off course than her. She will need all her skills to weather the tidal flood of desperate money that will soon be directed to make Germany and its neighbours pay Italian, Greek and Spanish debts or break the euro.

The American derivatives market, and their banks in general, are now in a desperate, wounded and feral state and they are going soon to turn from panic in their own markets to the forestalling of reckoning by displacing panic to others. Cutting interest rates (cuts which, by the way, are not being passed onto mortgagors but are instead being used to provide cheap money for banks) will not long stave off the monster of stagflation that has come up from the depths.

Germany shoulders so much. So I'm glad to see the German cabinet in Jerusalem, getting ready for a meeting on Thursday elsewhere, and to see decent, sensible Frau Merkel in Yad Vashem, and wishing the State of Israel mazeltov on its sixtieth birthday.